US economy to go into recession and depression: Tyche Group

Martin Hennecke,Snr Managar at Tyche Group answering a query by CNBC-TV18 on why some of the Asian markets that were open today looked a bleak picture said the picture looked bleak because there is lot of worry about the US economy in particular and so for the time being to some extent all the Asian markets are following the direction of US but at some point there will be more and more decoupling of Asia from the US.

He further adds that the fears of the US economy are very justified and we think most investors still even underestimate how bad the US economy really is. The US economy will go not just into a recession but actually a depression. But the question that arises is will the stock market in the US will fall further or will the US dollar be falling further? So if we see this situation getting around to very high inflation, which is what these interest rate cuts cause then we might be seeing further rate cuts from the Federal Reserve and that could again stimulate inflation said Hennecke.

He said Its tricky to say where exactly it goes in terms of markets but economically the US will definitely get a lot worse whereas Asia will fair relatively better but in the short-term we don’t know how the inflation-deflation scenario will play out and we think one should not invest with any levels in any market right now and definitely not in Europe and US.One must stick to core exposure to Asia ideally which have domestic demand stories and also hedge any portfolios with precious metal exposure as a crisis protection said Hennecke.